Determining a cash flow annuity with income tax considerations Walter Roth is considering whether to invest in a computer game machine that he would place in a hotel his brother owns. The machine would cost $14,000 and has an expected useful life of three years and a salvage value of $2,000. Mr. Roth estimates the machine would generate revenue of $7,000 per year and cost $1,200 per year to operate. He uses the straight-line method for depreciation. His income tax rate is 30 percent.

Required What amount of net cash inflow from operations would Mr. Roth expect for the first year if he invests in the machine?